King, 55, intends to retire on 4 March, after running the investment banking business for two years. King, who is based in New York, is said to be leaving because of UK rules seeking to hold senior managers to account.

The investment bank was built by Bob Diamond, who rose to become chief executive of the entire bank before leaving in the wake of the Libor-rigging crisis in 2012. Once the powerhouse of the bank, the division has proved controversial over it staff bonuses and ifor problems trying to comply with new rules requiring a ringfence between high street and investment banking operations.

On announcing his retirement, King said: “After nearly 25 years in my career, and having now seen the investment bank through a period of extraordinary change and on to a solid footing for the future, I feel the moment is right for me to pass the baton.”

Staley said he respected King’s decision. Staley has already named a new chief operating officer and new chief risk officer. Both these positions were filled by executives from JP Morgan, the Wall Street bank where Staley spent much of his career before leaving in 2013 to join New York hedge fund BlueMountain.

Paul Compton has been hired as group chief operating officer and CS Venkatakrishnan as chief risk officer, while Staley is also reported to have approached another former JP Morgan colleague – Blythe Masters – to run the investment bank. She is said to have turned him down.

It was Staley’s second attempt to join Barclays. He was on the brink of being offered the role when Jenkins was appointed in 2012. Jenkins, who was running Barclays’ retail bank, was seen as a politically more appropriate choice than Staley because the position was being filled during the height of the Libor rigging scandal.

Staley is preparing to make his first presentation to the City on 1 March, when the bank’s 2015 results are due to be published. He has signalled that investment banking revenues fell 10% in the fourth quarter and started to cut 1,200 jobs in the division.